Question

Opinions on corporate responsibility vary widely, even among informed economists, on a spectrum from “Corporations have a duty to contribute to the common good, even at the expense of overall profits” to “Corporations have zero responsibility to anyone but their shareholders (although social investment may be profitable).” What ethical responsibilities do you think corporations have? Do they have a duty to protect the common good, or should they only focus on their shareholders? What do you think should happen to corporations that do not live up to their duties?

Answer 1

ANSWER-​​​​​​ the concept of corporate social responsibility(CSR) focuses on the idea that beyond making profit, a business has social obligations. It is the responsibility of the companies to produce an overall positive impact on the society. CSR is pursued by business to balance their economic,environmental and social objectives while at the same time addressing stakeholder's expectations and enhancing shareholders value. Stakeholders, including shareholders, analysts, regulators, labour union, emoloyees, community organisations and mass media expect companies to be accountable not only for their own performance but for the performance of their entire supply chain. Issues such as peace, sustainable development, security, poverty alleviation, environmental Quality and human rights have a profound effect on business and its environment.

Corporate social Responsibility is the Continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Need for social responsibility are;

>to fulfill long term self-interest.

>to establish a better public image.

>to avoid government regulation and control.

>to convert resistances into resources.

It is the duty of corporations to protect the common good as well as the interests of shareholders because both aspects are very important for the growth of a business.

for example -Despite being one of the largest corporations in the world, Google is an excellent example of a business that is constantly working for the betterment of society. In addition to various other CSR initiatives, the company has implemented a widely successful environmental policy called Google Green, which is a corporate effort to use resources more efficiently and support renewable energy sources. It has led to an overall reduction in power requirements for their data centers by 50 percent.

If a company wants to keep the investors and shareholders interested in its vision, it must reinforce their trust in itself, time and again. One of the guaranteed ways to do so is to contribute meaningfully towards the communities that the company cares for. CSR is a great medium for it. In the absence of it, the investors may become sceptical of the company for not being socially responsible and thereby not having generous intentions over the long run. Consequently, investors’ funds in the company might get affected in the long run.